How American Health Care Killed My Father by David Goldhill
I expected a horror story that ended with a desperate call for a single-payer solution. My suspicions were intensified when Goldhill identified himself as a Democrat!
Instead I found a well-reasoned, long and detailed analysis of problems with American health care that I mostly agreed with, plus a solution approach that has some merit, though I do not buy it completely.
I strongly recommend you read it all at http://www.theatlantic.com/doc/200909/health-care
In brief, Goldhill's 83 year-old father checked into "a well-regarded nonprofit hospital in New York City" with a case of pneumonia. Some weeks later, he went out feet first, dead from a hospital-acquired infection. His wife received a bill for over $636,687.75, all but about $992 paid by insurance.
Goldhill blames the hospital, of course, for the hospital-acquired infection. Clearly, some doctor or health-care worker failed to properly wash his or her hands. However, he does NOT take the conventional "lesson" that more government regulation and rules would have solved the problem. Nor does he blame the insurance company and Medicare for a lack of monitary support in this case. Quite the contrary, he blames the availability of Medicare and insurance money for both the high cost and lack of quality of American health care!
Please read the whole story, but here is the final part:
Ten days after my father’s death, the hospital sent my mother
a copy of the bill for his five-week stay: $636,687.75. He was charged $11,590
per night for his ICU room; $7,407 per night for a semiprivate room before he
was moved to the ICU; $145,432 for drugs; $41,696 for respiratory services. Even
the most casual effort to compare these prices to marginal costs or to the costs
of off-the-shelf components demonstrates the absurdity of these numbers, but why
should my mother care? Her share of the bill was only $992; the balance,
undoubtedly at some huge discount, was paid by Medicare.
Wasn’t this an extraordinary benefit, a windfall return on American
citizenship? Or at least some small relief for a distraught widow?
Not really. You can feel grateful for the protection currently offered
by Medicare (or by private insurance) only if you don’t realize how much you
truly spend to fund this system over your lifetime, and if you believe you’re
getting good care in return.
Would our health-care system be so outrageously expensive if each
American family directly spent even half of that $1.77 million that it will
contribute to health insurance and Medicare over a lifetime, instead of
entrusting care to massive government and private intermediaries? Like its
predecessors, the Obama administration treats additional government funding as a
solution to unaffordable health care, rather than its cause. The current reform
will likely expand our government’s already massive role in health-care
decision-making—all just to continue the illusion that someone else is paying
for our care.
But let’s forget about money for a moment. Aren’t we also likely to get
worse care in any system where providers are more accountable to insurance
companies and government agencies than to us?
Before we further remove ourselves as direct consumers of health
care—with all of our beneficial influence on quality, service, and price—let me
ask you to consider one more question. Imagine my father’s hospital had to
present the bill for his “care” not to a government bureaucracy, but to my
grieving mother. Do you really believe that the hospital—forced to face the
victim of its poor-quality service, forced to collect the bill from the real
customer—wouldn’t have figured out how to make its doctors wash their
A few weeks ago I posted We Need COST-EFFECTIVE Health Care Reform, in which I called for three basic changes:
1) Universal digititized patient data, securely accessible by any doctor chosen by the patient. This part should be easy to sell to both political parties and all medical specialties. It has been technically feasible for a decade an it is past time we do it.
2) Tort reform to eliminate high malpractice premiums and defensive medicine with unnecessary tests that add up to 10% to costs. This will be a hard sell to the majority party that is in the pocket of trial lawyers.
3) Outcome-based reimbursement to eliminate costly surgery and medications that do not yield comparative effectiveness based on quality-adjusted life years. This will be a hard sell to the minority party, some of whose members originally proposed it but who have backed away due to the onslaught of opposition based on "pulling the plug on granny".
After reading the above story, I would add the following:
4) Mandatory Catastrophic Insurance coverage for all that would cover only medical costs incurred in any one year of over $50,000 or a chronic condition that incurs costs of over $5,000 per year for ten years. That coverage would include a voucher for a basic checkup once a year. The government would subsidize coverage for those who could not afford the relatively low premiums for catastrophic coverage. Goldhill estimates a yearly premium of $2,000 for this type of coverage. (By comparison, my wife and I are paying around $10,000 each if you include our out-of-pocket insurance and Medicare costs plus the contribution of my former employer and of government Medicare funding.)
5) Mandatory Health Savings Accounts for all that would be tapped into for actual medical costs incurred, but would remain the property of the owner of the account (you, or your heirs) if not fully expended. Employers and employees/retirees would pay into the Health Savings Accounts the difference between what they are currently paying for comprehensive insurance and out-of-pocket medical costs now and the lower cost of Catastrophic-only insurance. (For example, my wife and I would see about $8,000 per year for each of us pass into our Health Savings Accounts.) Young, healthy families with low medical expenditures would see their Health Savings Accounts grow by thousands of dollars per year, accruing as savings to prepare themselves for the likely increasing medical costs as they age. Those not so fortunate, who incur medical costs, would expend the funds in their Health Savings Accounts until the accounts were tapped out, and would then pay the remainder out of their pockets and savings, until they hit the catastrophic limits and then Catastrophic-only insurance would kick in.
The point would be to make the recipients of health care more conscious of the actual costs. Instead of calling an ambulance for every event, they would be more likely to drive the injured person to the hospital or use public transit if possible. Instead of accepting the first doctor's advice for expensive medicines or tests or procedures (that may be in the doctor's self-interest - he or she may have a boat payment due) they would be more likely to shop around for lower-cost options. That would drive down the costs of medical care for everybody and make the providers more responsive to their customers, who would be the actual recipients of health care rather than the government and insurance companies.